Newly public Snap is having a rough time since it started trading on the New York Stock Exchange in March, with many investors apparently dumping shares. Not among the sellers: its two biggest individual shareholders, Snap CEO Evan Spiegel and his cofounder Bobby Murphy. According to Spiegel, who spoke on Thursday’s earnings call, neither of them will sell any Snap stock in 2017, despite their lockup expiring in August.
It’s a move they may later regret. Snap stock dropped nearly 17% in after-hours trading on Thursday after the company reported weak second quarter earnings that missed expectations for revenue, earnings and user growth. The plunge shaved $500 million apiece off of Spiegel’s and Murphy’s fortunes. As of 7 p.m. Eastern, they each had a $2.6 billion fortune, down from $3.1 billion at the close of markets.
Part of the reason for the drop was the fact that Snap reported slowing user growth in the second quarter. Daily active users only increased 7.3 million, or 4%, from the first to the second quarter, while analysts expected an increase of 10 million daily active users. Snap also reported revenue of $181.7 million, below analyst expectations of $186.8 million, and a net loss of 16 cents a share, larger than the 14 cents that analysts predicted.
At least the founders didn’t lose as much as they did when Snap announced its first quarter earnings report in May. Snap stock dropped 24% in after-hours trading that day after the company reported its first quarter earnings, slicing Spiegel and Murphy’s fortunes by $1.2 billion.
Spiegel and Murphy’s net worths are now less than half what they were at the end of the day of Snap’s initial public offering. On March 2, the day of the IPO, the cofounders ended the day worth $5.4 billion apiece, up $1.4 billion each since the IPO was priced the night before.
Spiegel and Murphy have plenty of time to make back the money, or lose even more. The pair are now the only self-made billionaires under the age of 30 to own a publicly traded company. They met as fraternity brothers at Stanford U. and founded Snapchat together in 2011. Spiegel first appeared on Forbes’ Billionaires List in March 2015 with $1.5 billion when Snapchat was valued at $10 billion. The company grew to an $18 billion valuation before its IPO in March. Outside of work, things are going well for Spiegel, 27, who married former Victoria Secret model Miranda Kerr in June 2017.
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